WEITZ v. YANKOSKY

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District Court of Appeal, Second District, Division 4, California.

Harry WEITZ, Plaintiff and Appellant, v. John Joseph YANKOSKY, Defendant and Respondent.

Civ. 28121.

Decided: April 21, 1965

Memel, Memel, Jacobs & Weissburg and Stanley K. Jacobs, Hollywood, for plaintiff and appellant. Kinkle, Rodiger, Graf & Dewberry and William B. Rodiger, Los Angeles, for defendant and respondent.

This is an appeal by plaintiff from an order granting a motion to set aside a default judgment against defendant. Plaintiff contends the trial court abused its discretion in vacating the judgment.

On June 2, 1961, plaintiff filed a complaint seeking damages for personal injuries and property damage allegedly suffered in an automobile accident with defendant. Service upon defendant of the summons and complaint was made on June 4, 1961. Defendant failed to answer or otherwise appear in the action, and a request for entry of default was filed and entered on November 17, 1961. On May 31, 1962, a default judgment against defendant was granted in the sum of $5,177.75 plus costs. Entry of the judgment was on June 6, 1962. On August 9, 1963, defendant filed a notice of motion to set aside the default judgment. After a hearing, the court, on September 26, 1963, granted the motion, giving defendant 10 days to file his proposed answer. answer. A motion to reconsider, filed by plaintiff, was denied on October 18, 1963. Plaintiff's appeal, the notice of which recites that the appeal is from the order granting the motion to set aside the default judgment and from the whole of the judgment or, in the alternative, from the order denying plaintiff's motion to reconsider, is treated as being from the order granting the motion setting aside the default judgment.

A number of affidavits, including one executed by defendant, were introduced in the lower court in support of the motion to set aside the default judgment. In opposition to the motion, plaintiff introduced the declaration of his attorney in which a portion of the deposition of defendant, taken in a subsequent suit brought by plaintiff against defendant's insurance carrier, is quoted.

Defendant's affidavit and the quoted portion of his deposition contain a statement of the facts as follows: The action brought by plaintiff arose out of a two-car automobile collision between plaintiff and defendant. At the time of the accident, which occurred on April 19, 1961, defendant had stopped his vehicle after backing out of a private driveway. Defendant's automobile was then struck in the rear by an automobile operated by plaintiff. After reporting the accident to the police department, defendant telephoned his insurance agent informing him of what had occurred. Defendant then filed an SR–1 form with the Department of Motor Vehicles, stating that defendant was insured under an automobile liability policy with Trinity Universal Insurance Company (hereinafter sometimes referred to as Trinity).

During the month of May 1961, defendant was contacted by Allstate Insurance Co., plaintiff's insurance carrier. A settlement was agreed upon by which Allstate paid defendant for his property damages and $300 to $400 for his personal injuries.

On June 4, 1961, defendant was served with the summons and complaint in the action of June 2 brought by plaintiff against defendant. Defendant read the summons and complaint, and, on the same day, mailed them to Trinity, at its home office, in Dallas, Texas. Defendant sent the summons and complaint to an address in Dallas, the address given on the policy. He was not aware at the time that Trinity has an office in Los Angeles. Defendant heard nothing further concerning the status of the case until December 23, 1962. On the latter date he received an order of suspension of his driver's license from the Department of Motor Vehicles. The order stated that this action was being taken because of the unsatisfied judgment against him.

On January 2 or 3, 1963, defendant contacted his insurance agent. At defendant's request, the agent called Trinity. He was told that their files showed no record of the judgment, ‘that there must be some sort of clerical error.’ In February 1963, defendant, having discovered that Trinity has a Los Angeles office, went to this office and talked with Mr. McCormick, an adjustor with Trinity. The latter stated that he was going to follow the matter through and that it was going to be taken care of. Some time between February and April 1963, Mr. McCormick advised defendant that Trinity never received the copy of the summons and complaint mailed by defendant.

Early in April 1963, defendant was contacted by plaintiff's attorneys and advised of the entry of the judgment against him. Defendant was further told that he should contact his insurance company or secure the immediate services of an attorney. Defendant, presumably on approximately the same date, contacted an attorney who, although never employed by defendant, made inquiries from plaintiff's attorneys concerning the facts and circumstances surrounding the default judgment.

The evidence before the trial court further indicates that plaintiff brought a separate suit on May 1, 1963 (in Los Angeles Superior Court, case number 817995), against Trinity, seeking to recover the amount of the default judgment under Insurance Code, section 11580; Trinity answered, interposing a defense of no service of summons and failure on the part of defendant to cooperate; the deposition of defendant was taken on July 23, 1963; after obtaining a reservation of rights agreement from defendant, Trinity, on August 9, 1963, filed the motion on behalf of defendant to set aside the judgment which the trial court thereafter granted.

In addition to defendant's affidavit, the affidavits of seven employees in Trinity's Dallas office were filed in support of the motion to set aside the judgment, indicating that the insurance company did not receive the summons and complaint mailed to it.

According to the affidavit of plaintiff's attorneys, filed in opposition to the motion, neither plaintiff nor his attorneys learned of the reservation of rights agreement or of defendant's intention to move to set aside the judgment, until July 23, 1963, at the time of the taking of defendant's deposition in case number 817995.

Defendant's motion for relief was made, not under section 473 of the Code of Civil Procedure (more than six months having elapsed from the time of entry of the default and judgment), but was addressed to the equity power of the superior court to set aside the judgment on grounds of mistake of fact. (Olivera v. Grace, 19 Cal.2d 570, 122 P.2d 564, 140 A.L.R. 1328; Hill v. Johnson, 194 Cal.App.2d 779, 15 Cal.Rptr. 236.)

Although, as defendant points out, the law clearly recognizes where a party was prevented by extrinsic accident and mistake of fact from presenting his defense to an action, that such accident and mistake furnishes a ground for equitable intervention (Hallett v. Slaughter, 22 Cal.2d 552, 140 P.2d 3; Crane v. Kampe, 225 Cal.App.2d 200, 37 Cal.Rptr. 220; Hill v. Johnson, supra, 194 Cal.App.2d 779, 15 Cal.Rptr. 236), the law is equally settled, that a party moving to set aside a default judgment must show diligence in presenting his motion after discovery of the default. (Benjamin v. Dalmo Mfg. Co., 31 Cal.2d 523, 190 P.2d 593; 3 Witkin, Cal. Procedure, p. 2133.)

The Supreme Court, in Benjamin v. Dalmo Mfg. Co., supra, 31 Cal.2d 523, 190 P.2d 593, held that it was an abuse of discretion to vacate a default judgment under section 473 of the Code of Civil Procedure where there was a three months' unexplained delay in bringing suit after notice. In that case, an office secretary of defendant, misunderstanding the instructions of her superiors, filed a summons and complaint in the office files instead of forwarding the documents to defendant's attorney for his attention. A default judgment was taken against defendant. Defendant's officers learned about the judgment the day after its entry, located the misfiled documents, and immediately forwarded them to defendant's attorney. However, no action was taken to open the default for approximately three months and no explanation was given for the delay. The trial court granted defendant's motion to open the default. In reversing the order, the Supreme Court indicated that, while defendant's failure to file an answer within the required time might be excusable because of the secretary's misunderstanding, yet the defendant's failure to offer any reasonable explanation for the delay in taking steps to set aside the default judgment was fatal to its motion.

In support of its order granting defendant's motion to set aside the default judgment, the trial court in the case before us, relied on Hallett v. Slaughter, supra, 22 Cal.2d 552, 140 P.2d 3. The Supreme Court in Hallett v. Slaughter, supra, sustained the action of a trial court in vacating a default judgment against one Hallett where it was shown that an answer to the complaint in the action, which was prepared by Hallett's attorney and mailed by his secretary, never reached the court. The Supreme Court found that the mistaken belief that the answer was on file prevented Hallett from setting up her defense to the action. In reaching this conclusion, the court found that, although some degree of negligence could be charged to Hallett's attorney in not sooner discovering that Hallett's answer had not been filed, the evidence did not show inexcusable neglect as a matter of law. The court further found that Hallett was diligent in bringing action to vacate the judgment after learning of the mistake when, in the words of the court (p. 557, 140 P.2d p. 6), ‘This suit was commenced within a few weeks [approximately six weeks] after plaintiff [Hallett] learned of the mistake and has been diligently prosecuted by her.’

On the issue of diligence a far different picture is presented in the case before us than was presented in the Hallett case supra. Here, defendant was put on notice of the judgment nearly eight months prior to filing his motion for relief, when, on December 23, 1962, he received the notice from the Department of Motor Vehicles that proceedings were pending for revocation of his operator's license because of the unsatisfied judgment. Defendant's conduct after receiving this notice indicates a seemingly careless attitude in the matter, as evidenced by the following answers given by him at the taking of his deposition:

‘Q. After mailing the summons and complaint to Trinity Universal Company, when was the next time you heard anything concerning the status of this matter?

‘A. It would be from the Department of Motor Vehicles in December of 1962—the end of December, the 23rd of December, right before Christmas of 1962.

‘Q. And how did you receive contact?

‘A. Registered mail.

‘Q. What did they tell you in that registered letter?

‘A. That there was a judgment against me and that my license was going to be revoked shortly, within a couple of weeks I guess.

‘Q. What did you do immediately upon receiving such a notice?

‘A. Well, it was right before Christmas, and I picked it up and let it slide I guess to right after the first of the year, the 2nd or 3rd of January, upon which time I went and saw Mr. Needham [defendant's insurance agent].’

Defendant states in both his affidavit and deposition that he relied on the assurances given by representatives of his insurance carrier that the notice was sent by mistake and that ‘they would take care of it.’ Further, he argues that he was confused or lulled into the belief that the matter was disposed of, because plaintiff's insurance company had settled with him. While such arguments might well have explained the delay from December 1962, through March 1963, they do not explain the nearly four-month delay thereafter. In late March or early April defendant was personally contacted by plaintiff's attorneys, informed of the judgment and advised to secure the services of an attorney. At about the same time, an attorney friend of defendant, inquiring in defendant's behalf, was informed by plaintiff's attorneys of all of the facts and circumstances surrounding the default judgment. So also was defendant's insurance carrier informed. The record before us is barren of any explanation for the four-month delay thereafter in filing the motion to vacate. Indeed, it was not until after plaintiff had filed a lawsuit against defendant's insurance carrier pursuant to the Insurance Code, and had initiated discovery proceedings in that lawsuit, that the motion to vacate was finally filed on August 9, 1963, four months after defendant and his insurance carrier had been informed by plaintiff of the judgment, and eight months after defendant first could be taken to have received notice of its entry. Nor was plaintiff given any intimation either by defendant or his insurance carrier that proceedings would be instituted to set aside the default judgment until July 23, 1963, again nearly four months after defendant was informed of the judgment, at the taking of defendant's deposition in the suit brought against the insurance carrier. The following language of the court in Benjamin v. Dalmo Mfg. Co., supra, 31 Cal.2d 523, 529, 190 P.2d 593, 596, is particularly applicable here: ‘Courts do not relieve litigants from the effects of mere carelessness. Defendant has not cited, nor has independent research disclosed, any case in which a court has set aside a default where, in making application therefor, there has been an unexplained delay of anything approaching three months after full knowledge of the entry of the default.’

The order is reversed.

JEFFERSON, Justice.

FILES, P. J., and KINGSLEY, J., concur.

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